New Study Outlines What Institutional Investors Say Should Be in a CEO’s Long-Term Plan

New Study Outlines What Institutional Investors Say Should Be in a CEO’s Long-Term Plan

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Out today is the second in Strategic Investor Initiative's white paper series, "Emerging Practice in Long-Term Plans". With a run-down of critical components in effective LTPs, this paper is a crucial part of IR toolboxes:

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Thursday, November 8, 2018 - 11:05am

CAMPAIGN: CECP's CEO Investor Forum

CONTENT: Press Release

NEW YORK, November 8, 2018 /3BL Media/ — Institutional investors want to hear more from CEOs about how they are positioning their company to succeed in the long-term, according to a new paper released by CECP’s Strategic Investor Initiative (SII), Emerging Practice in Long-Term Plans. According to investors, when presenting long-term plans, CEOs need to go deeper than just telling a good marketing story. Instead, they need to demonstrate that the company’s leadership understands how long-term issues impact value creation and has developed a strategy to mitigate risks and ensure sustainable business practices. At a basic level, institutional investors expect five essential elements in a long-term plan presentation; these disclosures should be or include:

  1. Additive to existing disclosures: Add information to the public domain or provide additional context for existing disclosures.
  2. More than marketing — contextualized disclosures: A strategic plan narrative is not a recitation of good news stories. Initiatives should be contextualized to help investors assess their significance.
  3. Focused by materiality: A long-term plan should disclose information that is material to the operating performance and financial prospects of the business.
  4. Integrated discussion of material Environmental, Social, and Governance (ESG) issues: These topics are widely acknowledged as core to business success over the long-term and should be a part of an integrated discussion — not a silo or presented as a list of “awards.”
  5. Forward-looking information: A long-term plan is an opportunity for a company to meaningfully talk about the future across a broad range of value-relevant topics, accompanied by goals, metrics, and milestones.

“The problem we currently face is that the existing marketplace for investor information is oriented to the short-term,” said Brian Tomlinson, SII’s Research Director and author of the report. “There’s an opportunity to decrease the information asymmetry between corporations and investors by increasing the amount and quality of long-term focused disclosures. Leading CEOs are demonstrating how this can be done”

In addition to the baseline content, Tomlinson notes that CEOs can enhance their presentations further by including disclosures around five key themes: risk factors and mega-trends; corporate governance; capital allocation; human capital management; and shareholder and stakeholder engagement. The paper offers examples from presentations delivered at SII’s CEO Investor Forums, including by BD, Delphi, PG&E, Medtronic, Merck, Aetna, Telia, and Prudential.

The study is built off the feedback from hundreds of investors that SII received about the 20+ presentations at SII’s five CEO Investor Forums over the previous two years. The Forums are a part of SII’s work to promote “long-termism” on Wall Street and in the C-Suites of the world’s leading companies.

SII’s Investor Letter also informs Tomlinson’s paper – specifically the seven questions CEOs should answer in their long-term plan presentations. The letter was signed by nine leading investors from SII’s Advisory Board, including SII co-chair and Chairman of Vanguard Bill McNabb. Most recently, Harvard Business School Professor George Serafeim co-authored an article in Harvard Business Review that offers preliminary indications that CEO presentations of long-term plans at SII’s CEO Investor Forums have a market impact, particularly on trading volume.

The CEO Investor Forums are a new platform for senior business leaders from the world’s leading companies to present long-term plans to long-term oriented institutional investors. The sixth CEO Investor Forum will take place in February 2019 and will feature long-term plan presentations from Mark Schneider, CEO, Nestle, Steven Collis, Chairman, President & CEO, AmerisourceBergen Corporation, Tim Hockey, President & CEO, TD Ameritrade Holding Corporation, and Marco Tronchetti, Executive Vice Chairman & CEO, Pirelli. More information about this CEO Investor Forum and additional forums planned for 2019 can be found at:  

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CECP is a CEO-led coalition that believes that a company’s social strategy — how it engages with key stakeholders including employees, communities, investors, and customers —determines company success.  Founded in 1999 by actor and philanthropist Paul Newman and other business leaders to create a better world through business, CECP has grown to a movement of more than 200 of the world’s largest companies that represent $11.3 trillion in revenues, $23.8 billion in societal investment, 17.4 million employees, and $15 trillion in assets under management. CECP helps companies transform their social strategy by providing customized connections and networking, counsel and support, benchmarking and trends, and awareness building and recognition.  



The Strategic Investor Initiative is a coalition of thought leaders committed to the long-term movement. Collectively, SII is developing a new platform for leading companies to create, convey, and deliver long-term plans to long-term investors. SII’s vision is to spark the movement of trillions of dollars of capital to companies demonstrating performance excellence over the long-term. SII provides tools and resources designed to introduce and support market behaviors that ultimately deliver sustained long-term value for all stakeholders.